In a statement on Friday, the world’s largest diversified resources company said it was awarded a 60% interest in Block N and Block Q by Malaysia’s national oil company, Petronas.

The blocks are located 175km offshore from Kota Kinabalu, the state capital of Sabah, in water depths ranging from 1600-2800m.

BHP Billiton Petroleum vice president global exploration Rob Pascoe said the company viewed the offshore Sabah region as a highly prospective area.

“We believe this is a lightly explored area where we can apply and extend our two decades of exploration and production experience obtained in offshore and deepwater operations from Australia, the Gulf of Mexico, and elsewhere around the world,” he said.

In return for its 60% stake, BHP will undertake a seven-year exploration program involving seismic acquisition and reprocessing, as well as wildcat drilling in the blocks.

Petronas, which holds the remaining 40% interest, will be fully-carried through the work program.

In other company news, BHP says it has successfully completed its $A3.5 billion off-market share buyback, representing 4.03% or 141.1 million shares of the company.

BHP said this completed the first stage of the $US10 billion ($A12.4 billion) buyback program announced last month.